N.Y. Can Make Nonresident Lawyers Have In-State Office

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By Joan C. Rogers

April 22 — A New York law requiring nonresident New York bar members to keep an office in New York if they wish to practice in New York state courts doesn't violate the Constitution's privileges and immunities clause, a divided U.S. Court of Appeals for the Second Circuit ruled April 22.

New Jersey attorney Ekaterina Schoenefeld—who's also licensed in New York—didn't show that the state enacted the statute for a protectionist purpose to favor New York resident lawyers over nonresident lawyers, Judge Reena Raggi said for the majority.

The decision is significant for nonresident New York lawyers who don't have a New York office but want to use their New York license—or may want to at some point. The in-state office requirement is burdensome for nonresident lawyers and puts them at a competitive disadvantage, a group of these lawyers argued in an amicus brief.

The law in question is N.Y. Jud. Law §470, which requires nonresident New York lawyers to maintain an “office for the transaction of law business” within New York to practice in state courts. The statute requires a physical law office, New York's highest court held last year. See 31 Law. Man. Prof. Conduct 176.
Purpose Wasn't Protectionist

The court threw out a district court decision which held that Section 470 unconstitutionally discriminated against nonresident lawyers and infringed on their fundamental right to practice law without advancing any substantial state interest.

Raggi said McBurney v. Young, 2013 BL 113068 (U.S. April 29, 2013), made clear that a state law distinguishing between residents and nonresidents violates the privileges and immunities clause only when the state enacted the law for the protectionist purpose of burdening nonresidents with regard to privileges and immunities afforded to the state's own residents.

Raggi said New York enacted Section 470 not to favor resident lawyers but rather to provide a way for nonresident lawyers to establish a physical presence in New York, thereby resolving the concern that nonresident attorneys could not be served with process.

The office requirement ensures an in-state place for service of process so that nonresident New York lawyers may practice in the state on functionally the same terms as resident lawyers, Raggi said.

Effects Don't Show Favoritism

Raggi denied that the allegedly burdensome effects of Section 470 on nonresident attorneys support an inference of protectionist intent.

The office requirement places nonresident and resident lawyers on an equal footing, Raggi said. Every attorney admitted to the New York bar and who wants to practice there must have a presence in the state in the form of a physical premises, she said.

“The fact that a nonresident attorney will have to establish that presence by leasing an office, while a resident attorney can use his home, does not unduly burden the nonresident,” Raggi said.

The Third and Tenth Circuits have rejected privileges and immunities challenges to statutes that expressly require all lawyers to have a physical presence in the state, Raggi said. The effects of Section 470 are no different from the effect those statutes have, she said.

Judge Susan L. Carney joined the majority opinion.

Backwards

In a long dissent Judge Peter Hall said the majority stood constitutional law on its head, reversing the state's burden when a law discriminates against out-of-state residents.

Hall said Section 470 discriminates on its face against nonresident attorneys by burdening them with the expense of maintaining an office in New York while exempting resident attorneys from the same requirement because they can work from home if they want to.

The state therefore has the burden, under settled privileges and immunities law, of demonstrating a substantial interest that justifies the discrimination and that the means chosen bear a close and substantial relation to that interest, he said.

The majority wrongly required Schoenefeld to make out a prima facie case of discriminatory intent, Hall said.

He said the New York statute has protectionist aims and that the justifications the state gave for the physical office requirement are plainly not sufficient.

Ekaterina Schoenefeld, Princeton, N.J. appeared pro se. Assistant Solicitor General Laura Etlinger represented the state.

To contact the reporter on this story: Joan C. Rogers in Washington at jrogers@bna.com

To contact the editor responsible for this story: Kirk Swanson at kswanson@bna.com

For More Information

Full text at http://www.bloomberglaw.com/public/document/Schoenefeld_v_Schneiderman_No_114283cv_2016_BL_128636_2d_Cir_Apr_.

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